Report Summary

What is Fuel Cells Market Size and Growth?

The Global Fuel Cells Market size reached a valuation of around USD 6 billion in 2022. Projections indicate that the demand for fuel cells is expected to surge, reaching about 6 GW of installations by 2030. This represents a substantial increase from more than 2 GW of demand (deployments) recorded in 2022. Similarly, about 90,000 Units of fuel cells were shipped in 2022. According to the future outlook, the Fuel Cells Market is projected to grow at a remarkable compound annual growth rate (CAGR) of 21% during the forecast period from 2023 to 2030. This trajectory is expected to culminate in a market valuation surpassing USD 30 billion by 2030, underscoring significant growth opportunities in the fuel cells industry.

The global shift toward clean and renewable energy, driven by regional governments striving to curb carbon emissions, is spurring growth in the fuel cell market. Subsidized research and development activities in fuel cell technology, facilitated by government initiatives and growing public-private partnerships, are further propelling this trend. The reduced environmental footprint of fuel cells and increasing demand for fuel cell vehicles worldwide contribute to market expansion. Governments across the globe are expected to bolster fuel cell (FC) industry developments by providing various forms of support, including funding for research and development and suitable financing programs.

In the long term, the anticipated decline in the costs of green and blue hydrogen production is poised to propel the market forward during the forecast period. The growing demand for stationary power applications, driven by the advantages of high efficiency, fuel flexibility, and the use of direct current, has further bolstered the fuel cell market. Additionally, increased research and development efforts dedicated to hydrogen-powered vehicles are driving the adoption of fuel cell technology across various modes of transportation, including light-duty FC vehicles, FC buses, heavy-duty FC trucks, and others. Furthermore, the expansion into other motive power applications, such as marine, UAVs, eVTOLs, forklifts, and other material handling equipment, is expected to provide a substantial boost to the fuel cells market.

What is Fuel Cell?

A fuel cell (FC) is an electrochemical device that directly converts the chemical energy stored in various fuels, such as hydrogen, methanol, gasified coal, natural gas, biogas, and others, along with an oxidant, either pure oxygen or air, into electricity. Unlike traditional combustion processes, fuel cells operate without burning fuel and lack moving parts. This unique characteristic results in a quiet, pollution-free, and highly efficient energy conversion process. Notably, when hydrogen serves as the fuel, the only byproducts are water vapor and some heat, making it an environmentally friendly choice.

In contrast to batteries, fuel cells do not necessitate recharging and can continuously produce electricity until the fuel supply is depleted. It is important to note that an individual fuel cell generates slightly less than 1 V, which is generally insufficient for most applications. Thus, to achieve practical voltage levels, multiple individual fuel cells are typically arranged in series, creating what is known as a fuel cell stack.

Fuel cells are primarily categorized based on the type of electrolyte they employ. This classification subsequently determines the specific electrochemical reactions occurring within the cell, the catalysts required, the temperature range for operation, the type of fuel required, and other critical factors.  Fuel cells find applications in various fields, including transportation and motive power, stationary power generation, and portable power solutions.

What are the Fuel Cells Market Segmentations and Bifurcations?

Fuel Cells Market Segmentation by Product Type

• Alkaline Fuel Cells (AFC)
• Direct Methanol Fuel Cells (DMFC)
• Molten Carbonate Fuel Cells (MCFC)
• Phosphoric Acid Fuel Cells (PAFC)
• Proton Exchange Membrane Fuel Cells (PEMFC)
• Solid Oxide Fuel Cells (SOFC)
• Others

In 2022, the fuel cells market was dominated by the Proton Exchange Membrane Fuel Cells (PEMFC) segment. PEMFCs constituted over 60% of the total units shipped worldwide in 2022, with their share in terms of megawatts (MW) accounting for around 80% of the overall global fuel cells market. This particular fuel cell technology finds extensive applications, including forklifts, automobiles, telecommunications, primary power systems, and backup power systems.

The versatility showcased by Proton Exchange Membrane Fuel Cells (PEMFCs) stands out as a primary driving factor behind the surging demand, which is fueled by the ever-growing need for clean power generation. Moreover, PEMFCs offer a plethora of advantages, including enhanced reliability, heightened operational efficiency, reduced operational costs, minimal maintenance requirements, and various other benefits. It is expected that these advantages will continue to play a pivotal role in propelling the market growth of PEMFCs in the foreseeable future.

The Solid Oxide Fuel Cells (SOFC) segment has regained prominence and is poised to deliver substantial returns throughout the forecast period. In 2022, it accounted for around 30% of the global fuel cell units shipped. The noteworthy attribute of solid oxide fuel cells (SOFCs) lies in their fuel flexibility, as they can operate on zero or low-carbon emission fuels such as hydrogen, ammonia, e-fuels, and even light hydrocarbons. SOFCs find applications across a diverse spectrum, encompassing utility-scale power generation, commercial and industrial (C&I) facilities, combined heat and power (CHP) systems, small off-grid residential units, data centers, marine operations, and healthcare facilities, among others. This versatility positions solid oxide fuel cells as a promising solution for zero-emission power generation.

SOFCs are ideally suited for continuous, steady-state operation owing to their extended ramp-up times. The added advantage of utilizing natural gas as fuel allows for SOFC integration with the gas grid, ensuring a consistent fuel supply for uninterrupted operation. This continuous operation characteristic contributes to a consistent power output from SOFCs.

Fuel Cells Market Segmentation by Size

• Large-Scale (Above 200 kW)
• Small-Scale (Up To 200 kW)

In 2022, the global fuel cell market was dominated by the small-scale segment in terms of size. This segment held the leading market share due to its versatile range of power output options. Small-scale fuel cell systems are accessible with power outputs spanning from just a few watts to multiple kilowatts. This adaptability has resulted in their widespread adoption across various end-use sectors.

The growing utilization of fuel cell systems to deliver substantial power solutions in residential and transportation sectors, driven by ambitious government initiatives such as in Japan, has ignited remarkable growth in the small-scale fuel cell market. This surge in demand is in response to the increasing need for cleaner and more sustainable energy solutions, positioning small-scale fuel cells as pivotal in the global energy landscape.

Fuel Cells Market Segmentation by Application

• Transportation & Motive Power
  • Passenger Cars & Light Duty Vehicles
  • Medium Duty Vehicles
  • Heavy Duty Vehicles
  • Marine Transport
  • Aviation & UAVs
  • Material Handling Equipment
• Stationary Power
  • Primary Power
  • Backup Power
  • Combined Heat & Power (CHP)
• Portable Power

In 2022, the stationary power application dominated the global fuel cells market, leading both in terms of revenue and units shipped, commanding a substantial market share exceeding 60%. This can be directly attributed to the surging demand for fuel cells emanating from distributed generation facilities and backup power applications. Additionally, the increasing integration of fuel cells in combined heat and power applications further underscores the versatility and exceptional efficiency that hallmark the stationary segment.

According to projections, the stationary power segment is poised for significant expansion during the forecast period, due to the remarkable adaptability and efficiency of stationary power. The utilization of fuel cells in stationary power applications, such as data centers and uninterruptible power supplies (UPS), is experiencing substantial growth. This growth aligns seamlessly with global initiatives aimed at achieving zero-emission targets and substantial investments in sustainable green energy.

The transportation & motive power application is poised to experience the most rapid expansion within the fuel cell market. This surge is propelled by a growing demand for fuel cell-powered forklifts and a substantial increase in research and development activities, particularly in the mature economies of Europe, Japan, and the United States. Furthermore, market growth in this segment is driven by intensified global research and development efforts, with a primary focus on the advancement of hydrogen-powered hybrid vehicles. Fuel cell-powered heavy-duty trucks, buses, light-duty vehicles, flex-fuel vehicles, marine vessels, and unmanned aerial vehicles (UAVs) have garnered considerable attention and are currently the focal points of rigorous and comprehensive R&D initiatives. These advancements reflect a global shift towards cleaner and more sustainable transportation solutions, aligning with the growing demand for environmentally friendly alternatives to fossil fuels across various transportation sectors.

The portable power application of fuel cells encompasses a wide array of uses, including personal electronics, laptops, mobile phones, auxiliary power units (APUs), skid-mounted fuel cell generators, military equipment, and various consumer products. It extends to specialized domains such as CCTV, wildlife filming, environmental monitoring, and traffic signage, among many others. Key factors driving the adoption of fuel cells in portable applications comprise off-grid operational capabilities, extended run-times relative to conventional batteries, swift recharging, and the potential for substantial weight reduction.

Fuel Cells Market Segmentation by End User

• Commercial & Industrial
• Data Centers
• Military & Defense
• Residential
• Transportation
• Utilities & Government Institutes

The commercial and industrial end-user segment is poised for rapid growth during the forecast period. This segment embraces various types of fuel cells that cater to industries such as oil & gas, telecommunications, logistics & warehousing, electronics, and consumer goods, enabling them to mitigate greenhouse gas (GHG) emissions.

For example, Toshiba Energy Systems & Solutions Corporation has implemented its H2Rex pure hydrogen fuel cell system at the Toyota Motor Corporation’s Honsha Plant. This installation is part of the Hydrogen Power Generation Park, a demonstration site within the plant's on-site electricity generation facility.

Similarly, II-VI Incorporated, a manufacturer of 3D sensing technologies, has chosen to diminish its environmental footprint by implementing a fuel cell-based microgrid at its New Jersey manufacturing facility. This decision arises from the necessity to meet increased power demands for its growing operations, a task that the local electric utility cannot adequately fulfill.

What are the Major Growth Drivers, Restraints, and Opportunities in the Fuel Cells Market?

Government Support and Technological Advancements Powering Fuel Cell Industry

Government support and technological advancements have been pivotal drivers behind the growth of the fuel cell market. Governments worldwide have provided financial incentives, policy initiatives, and substantial research funding to propel this industry forward. These efforts have, in turn, fueled continuous technological advancements in fuel cells, further accelerating their adoption.

Continuous research and development initiatives have yielded significant improvements in fuel cell efficiency. This, in practical terms, means higher energy conversion rates and reduced operational costs, rendering fuel cells increasingly attractive across a wide spectrum of end-user industries.

Furthermore, advances in materials, electrolytes, catalysts, and engineering have greatly enhanced the durability and longevity of fuel cell stacks. This extended operational lifespan translates to lower maintenance and replacement costs for fuel cell systems.

Ongoing research is driving down the costs of various fuel cell components, making fuel cell technology increasingly competitive compared to other energy sources. Research initiatives have also succeeded in expanding the range of fuels compatible with fuel cells. While hydrogen remains the preferred fuel source, advances in fuel processing technologies have enabled the utilization of alternative fuels such as natural gas and methanol, among others.

Advancements in miniaturization have resulted in the creation of compact and highly portable fuel cell systems, well-suited for applications in laptops, mobile phones, drones, and various other portable electronic devices. Among the various fuel cell types, Direct Methanol Fuel Cells (DMFCs) stand out as the preferred choice for these portable fuel cell systems.

Fuel Cell Vehicles Drive Growth in the Fuel Cell Market: An Eco-Friendly Alternative to Traditional Transportation

The ongoing effort to replace fossil fuel-powered vehicles with low-emission and alternative options has placed significant focus on a few key technologies, including battery electric vehicles (BEVs), fuel cell vehicles (FCVs), hybrid vehicles, and flex fuel vehicles. All of these alternative vehicle types offer the advantage of zero or reduced tailpipe emissions, distinguishing them as environmentally friendly choices for consumers compared to internal combustion engine (ICE) vehicles.

Hydrogen fuel cells are gaining prominence in the transportation sector, especially for heavy-duty vehicles such as trucks, buses, and trains. These vehicles offer substantial benefits, including extensive driving ranges, swift refueling capabilities, and the complete elimination of tailpipe emissions. This shift toward fuel cell vehicles (FCVs) is notable across various vehicle categories, encompassing heavy-duty trucks, buses, vans, MPVs, passenger cars, as well as off-road vehicles such as forklifts and other material handling equipment (MHE).

• The Hydrogen and Fuel Cell Technologies Office (HFTO) of the U.S Department of Energy (DOE), reported more than 60,000 fuel cell forklifts in the U.S., in 2022.

In comparison to the most prevalent alternative vehicle type, battery electric vehicles (BEVs), fuel cell vehicles (FCVs) typically provide a longer driving range, significantly reducing the "range anxiety" frequently encountered by potential electric vehicle buyers. Additionally, the refueling process for FCVs, utilizing hydrogen, is typically faster and more convenient than recharging a BEV with electricity, especially in regions with limited fast-charging infrastructure.

As consumer awareness continues to grow, infrastructure for FCVs improves, and more manufacturers invest in FCV technology, the fuel cell market is poised for expansion during the forecast period. Additionally, competition with BEVs and advancements in hydrogen production methods further enhance the attractiveness of fuel cell technology within the automotive industry.

Hydrogen Economy Expansion Fuels Growth in the Fuel Cell Market

The recent and ongoing expansion of hydrogen (H2) economy has boosted the demand for fuel cells, particularly hydrogen powered fuel cells. Fuel cells utilizing hydrogen as the feed fuel, produce electricity with zero emissions. Hydrogen powered fuel cells are expected to play a critical role in global targets to reduce global warming and greenhouse gas emissions.

Sustainable hydrogen production has become a primary objective for governments and organizations worldwide. Extensive research and ongoing projects focused on green hydrogen production, in addition to the production of grey, brown, and blue hydrogen, have significantly influenced the adoption of fuel cells. The shift towards green hydrogen production, generated using renewable energy sources such as wind and solar power, aligns with sustainability goals and propels hydrogen as a clean energy carrier.

Several governments are investing in development of comprehensive hydrogen infrastructure encompassing storage, distribution, and production. This infrastructure plays a pivotal role in supporting hydrogen fuel cells in both transportation and stationary applications. Hydrogen also serves as a critical solution for large-scale energy storage, helping mitigate the intermittency of renewable energy sources such as solar and wind. The expansion of hydrogen refueling infrastructure facilitates operations for hydrogen-powered vehicles, further incentivizing their adoption.

The evolution of the hydrogen economy embodies a multifaceted trend that extends its influence across diverse industries and sectors. As ongoing investments continue to fuel technological advancements and infrastructure development, the fuel cell market is positioned for substantial growth in the forthcoming years.

High Costs, Low Durability, and Inadequate Infrastructure: Key Restraints and Challenges in Fuel Cells Industry

However, lack of adequate infrastructure in various countries, along with the escalating costs of catalysts used in fuel cells, acts as a barrier to the expansion of fuel cell industry. The foremost challenges in fuel cells commercialization are cost reduction and enhanced durability. Fuel cell systems must not only match but also outperform traditional power technologies in cost-effectiveness and performance over the lifespan. Current research primarily targets the identification and development of new materials that can curtail expenses and prolong the lifespan of fuel cell stack components, including membranes, catalysts, bipolar plates, and membrane-electrode assemblies. The adoption of low-cost, high-volume manufacturing processes is also crucial to enhance the cost competitiveness of fuel cell systems compared to traditional technologies.

What are the Regional and Country Trends in the Fuel Cells Market?

Fuel Cells Market: Regional Trends and Outlook

• Asia Pacific
• North America
• Europe
• South America
• Middle East & Africa

In 2022, Asia Pacific dominated the global fuel cells market with a substantial share of over 60%, and is poised to exhibit the fastest CAGR during the forecast period. The Asia Pacific fuel cells market has witnessed remarkable growth, propelled by strategic policies promoting fuel cell systems in transportation across key countries, including Japan, China, South Korea, and India among others. Notably, Japan leads as the primary fuel cell market in the region, closely followed by South Korea. The substantial demand for combined heat and power systems in Japan and other regional countries positions the fuel cell market for robust and sustained growth.

Several key factors propel market growth in the Asia Pacific region. These factors encompass the escalating energy demand, the imperative need for clean and sustainable energy solutions, and unwavering governmental support for technology adoption. Additionally, fuel cells find extensive application in backup power systems for critical infrastructure, including data centers and telecommunications facilities, thus providing a significant boost to the market. Furthermore, their widespread utilization in distributed power generation systems and backup power applications, coupled with the establishment of hydrogen refueling stations, further propels market expansion. Ongoing investments and research collaborations, alongside infrastructure development, are expected to bolster product adoption across diverse sectors in the region.

China recently revamped its fuel cell policy in March 2022, unveiling a blueprint for fuel cell technology deployment by 2035 under the National Development and Reform Commission. As the world's largest automotive market, China is at the forefront of rapid growth in fuel cell technologies compared to other regions. According to the National Development and Reform Commission, China aims to have approximately 50,000 hydrogen fuel cell vehicles (FCVs) on its roads by 2025, with substantial growth in hydrogen refueling stations. Sinopec, as part of China's 14th five-year plan, plans to establish 1,000 stations.

In 2022, North America also secured a significant market share. This was attributed to supportive legislation aimed at reducing carbon emissions and the availability of financing for fuel cell Research and Development (R&D) initiatives. North America is expected to generate substantial revenue throughout the 2023-2030 forecast period due to stringent emission regulations, a thriving consumer electronics sector, technological innovations, and the presence of key industry players. The region's growth is further fueled by the increasing adoption of electric vehicles, rising demand for continuous power supply across various applications, and widespread industrialization. Notably, California plays a pivotal role in the growth of the U.S. fuel cells market, spearheading demand for fuel cell passenger car sales and hosting the largest fleet of Fuel Cell Electric Buses (FCEBs) in the U.S., along with an extensive network of hydrogen fueling stations.

Europe, too, held a substantial share of the global demand for fuel cells, with a strong focus on fuel cell electric vehicles. Numerous European countries are actively deploying fuel cell buses and trucks, underscoring the region's commitment to green transportation solutions. Furthermore, the expansion of the hydrogen fueling station infrastructure is expected to continue throughout the forecast period till 2030. As of 2022, Japan led the global market with the highest number of hydrogen fueling stations, closely followed by South Korea, Germany, the US, China, France, and the UK, among others.

How is the Competition Scenario in the Fuel Cells Market?

Fuel Cells Market: Competitive Landscape and Outlook

The escalating demand for fuel cells, driven by emission reduction efforts and a growing need for clean power sources, has attracted a multitude of players to the global fuel cells market. As competition intensifies, both existing and new market entrants are striving to fortify their positions through strategic initiatives. This includes mergers & acquisitions, substantial investments in research and development, new product launches, strategic collaborations, and emerging markets development.

Some of the prominent players in fuel cells industry include Ballard Power Systems, Bloom Energy, Ceres Power, Cummins, Doosan Fuel Cell, Fuel Cell Energy, Horizon Fuel Cell Technologies, Nedstack Fuel Cell Technology, Plug Power, SFC Energy, Toshiba, AFC Energy, Bramble, Elcogen, Kyocera, Mitsubishi Power, Nuvera Fuel Cells, Panasonic, PowerCell, Pragma Industries, and SolydEra, among others.

In the stationary power application of fuel cells market, key players such as Bloom Energy, Doosan Fuel Cell, FuelCell Energy, and Panasonic have established dominant positions with leading market shares. Companies such as Ballard Power Systems, Fuel Cell Energy, Plug Power, and Ceres Power exhibit extensive integration throughout the value chain. These players have positioned themselves as key manufacturers, prioritizing R&D activities to pioneer cost-effective fuel cell technology for the automotive sector.

Recent years have witnessed a multitude of public-private partnerships aimed at securing funding and synchronizing actions between stakeholders to facilitate the introduction of hydrogen-powered vehicles. This concerted effort involves automobile manufacturers, oil and gas suppliers, and fuel cell manufacturers and integrators, collectively sharing the investment risk.

Prominent players in the fuel cell industry are directing their efforts toward manufacturing fuel cells that offer higher power density and efficiency, aiming to strengthen global adoption. Concurrently, various industry participants are venturing into regional or local production of fuel cell stacks. The capacity of fuel cell systems is consistently expanding, prompting manufacturers to devise tailored strategies to manage this growth effectively. These ongoing technological advancements, alongside a diminishing overall cost of fuel cell installations, will further enhance product deployment.

Fuel Cells Industry Developments

• In September 2023, Tata Motors delivered Hydrogen Fuel Cell-powered buses to the Indian Oil Corporation, as stipulated in an agreement to supply 15 FCEV buses. This initiative aims to evaluate the viability of hydrogen-based PEM fuel-cell technology in India, with these buses undergoing assessment as potential mass transport solutions for both inter and intra-city commutes.
  Notable features of these buses include a 350-bar hydrogen storage system, a 70 kW fuel cell stack, an electronic braking system with stability control for enhanced safety, an intelligent transport system, and a new-generation telematics system for efficient and user-friendly vehicle maintenance and tracking.

• In September 2023, Solaris Bus & Coach secured an order for 130 hydrogen-powered buses from the municipal public transport operator TPER in Bologna, Italy. The agreement also includes an option for the operator to extend the order by an additional 140 vehicles. These buses, known as the Urbino 12 Hydrogen Bus, are equipped with a 70 kW fuel cell system that derives hydrogen from five Type-IV composite tanks. With the capacity to hold 37.5 kg of hydrogen, these buses boast range of approximately 350 kms.

• In July 2023, Bloom Energy introduced its Series 10 Net-Zero compliant solution, a fuel cell technology aimed at accelerating the adoption of clean power generation.

• In June 2023, Energy Vault entered into a strategic partnership with Plug Power to procure 8 MW of hydrogen fuel cells. This collaboration constitutes a crucial component of the Hybrid Microgrid Back-up System project, catering to the energy needs of PG&E and the City of Calistoga.

• In May 2023, Nedstack Fuel Cell Technology BV renewed its partnership with GE Power Conversion, focusing on providing alternative electric and fuel cell power solutions within the merchant marine market.

• In April 2023, SFC Energy AG expanded its strategic partnership with Johnson Matthey, with the goal of advancing joint value creation in the growing hydrogen fuel cell market and implementing technology transfer for methanol fuel cell systems.

• In March 2023, Doosan Fuel Cell developed a hydrogen fuel cell-based business model through an agreement with Kolon Global, utilizing biogas.

• In March 2023, Ceres Power collaborated with Linde Engineering and Bosche GmbH to validate the cost, operational functionality, and performance of its Solid Oxide Electrolysis Cell (SOEC) fuel cell technology.

• In February 2023, FuelCell Energy partnered with MMHE to deliver solid oxide electrolyzers, implementing fuel cell technology for large-scale green hydrogen production.

• In December 2022, Plug Power announced a collaboration with Nikola Corporation, integrating green hydrogen fuel and fuel cell vehicles to decarbonize the hydrogen supply chain.

• In September 2022, Ballard Power Systems formed a strategic partnership with Quantron AG to accelerate the adoption of fuel cell trucks.

• In August 2022, Proton Motor introduced its hydrogen fuel cell system, HyRail, enabling train and engineering manufacturers, integrators, and SMEs to realize green, emission-free fuel cell electric drives.

• In June 2022, Doosan Fuel Cell entered into a Memorandum of Understanding (MoU) with KOSPO (Korea Southern Power), Samsung C&T, and KIER (Korea Institute of Energy Research). The MoU encompassed collaborative efforts in developing fuel cell-linked CCU technology and conducting ammonia fuel cell demonstration projects, among other initiatives.

• In March 2022, Ceres formed a partnership with HORIBA MIRA to jointly develop a fuel cell testing unit in the UK.

• In January 2022, FuelCell Energy announced the completion of site construction and the commencement of conditional commercial operation for its 7.4-megawatt SureSource fuel cell project in Yaphank, Long Island, New York.

• In August 2021, SFC Energy AG and Nel ASA collaborated on developing the world's first integrated electrolyzer and hydrogen fuel cell system for industrial markets, aimed at replacing diesel generators.

• In July 2021, Bloom Energy declared a 4.2 MW Combined Heat & Power (CHP) project in partnership with the SK Eco plant, marking South Korea's first utility-scale solid oxide fuel cell CHP initiative. The project leverages Bloom's SOFC technology in an innovative Power Tower format.